- Termination Fees in 2007 - Are they legal?
- Suing a Tenant for Money Owed
- Foreclosure and your Owners
- Hurricanes And Tropical Storms
- Supervision Of Children



by Harry Anthony Heist, Attorney at Law

It has been a number of years since the Yates vs. Equity Residential court decision in Palm Beach County rocked the rental housing industry. Years of the landlord charging a fair liquidated damages amount or termination fee when a tenant broke a lease came to an end when the court decided that these fees were somehow illegal, since they were not specifically provided for in the Landlord/Tenant Act. Although not binding precedent on other Florida courts, this very questionable interpretation of the law has been used by the law firm which originally brought suit against Equity to bring many more suits against other companies throughout Florida, resulting in millions of dollars being spent by the companies to fight the lawsuits and eventually settle the cases. But wait. Did they really come to an end? Many apartment management companies are still charging these Termination Fees, Lease Buy out amounts and liquidated damages, and in the process, they are exposing themselves to huge lawsuits. The attorney who is filing these suits has not let up and is actually sending out direct mail pieces to your tenants and former tenants, offering to review their case and possibly represent them if they were charged or paid a fee. When these lawsuits are filed, they are class action suits which cannot be settled simply by paying one tenant some money to go away.

Why are companies still charging these fees?

Some don't know about the lawsuits, some are taking a calculated gamble, and others just cannot comprehend how it could be considered illegal to charge such fair fees, fees which actually will benefit a tenant if the unit is not re-rented right away. Many companies have in-house out of state attorneys who refuse to believe that this is illegal, and some Florida attorneys representing Florida companies are still telling their clients that they can charge these fees, risky advice at best.

What can you charge a tenant when they break the lease?

In addition to the usual charges for past due rent and damages, according to Florida Statute 83.595, you are allowed to charge the tenant for rent as it becomes due until the sooner of such time as the unit is re-rented or the lease ends. Everyone knows that there are additional costs, (the costs have been calculated at about 2 months' rent) incurred due to a lease break by the tenant, but the law is silent on this issue. Silence should be golden here, but the court's interpretation says otherwise. The law neither specifically allows for early termination fees or rent acceleration, nor does it specifically allow a landlord to recoup concessions which may have been given.

Suppose a tenant wishes to buy out of the lease

Again, for years many leases provided an option to be invoked by the tenant which would typically allow the tenant simply to give 30-60 days' notice and pay 1-2 months' rent to buy out of the lease. The tenants loved this, as it allowed for certainty and flexibility, as circumstances may and do change for the tenant, especially in a transient state such as Florida. Can you do it now? NOT WITHOUT SIGNIFICANT RISK. Now the tenant is faced with possibly having to pay rent until the unit is re-rented, and in the current market, this could be months. Florida law does not provide tenants an early termination right, so an early termination option created under a lease would actually give the tenant another choice, but certain consumer right attorneys are threatening to challenge even a true option created for the tenant's benefit, an option which by definition the tenant could also choose not to take.

But wait! We heard that some companies can charge a Liquidated Damages Fee or Early Termination Fee!

This is true. The companies that have been sued and have settled are allowed, by a court approved settlement agreement, to charge up to 45 days of rent as a liquidated damages amount and are allowed to charge a tenant a buy-out fee of one month's rent if they give up to 60 days notice and agree to this in the lease or addendum. Unfortunately a settlement does not make or change law just because it is approved by the court.

Do you want to be able to charge these fees?

You can wait until you are sued, pay a couple million dollars, and then you most likely will be able to charge the fees under a settlement agreement. Is it worth the risk? We think not.

The Final Word --- for now.

Remove all references to termination fees, liquidated damages fees or acceleration of rent in your lease. Until we get a definitive answer from the courts, or Florida Statutes are changed to specifically allow us to charge these fees, you are in dangerous territory. Many companies have been sued, many more will be sued, and you do not want to be on the list. For fun, go to rodtennyson.com the website of the firm which is filing all these suits, and you can read the cases and judgments in depth. If your attorney tells you that you can charge these fees right now, get it in writing from your attorney, and make sure he or she has a massive amount of malpractice insurance.


(Back to Top)



by Harry Anthony Heist, Attorney at Law

If our office could collect just a small portion of the lost rents and damages suffered by the landlords we represent, we probably could close the doors in a year's time and live happily ever after in a mansion on a tropical island. The truth is, the money that tenants owe when they break a lease, get evicted and/or damage the premises is very difficult, if not impossible, to collect. Every day we get calls from upset landlords asking us if we can collect the money owed to them, or if we will file a lawsuit to collect the money. Our usual answer? No. The reasons behind this are many. Most tenants who could not care less about abiding by the terms of their lease will not pay you the money they end up owing you. Many are just uncollectible or owe so many people money, you are just not high on their list.

Florida is a "Debtor State"

While Florida is considerably landlord friendly when it comes to evicting the tenant, the collection laws favor the debtor. It is ironic that tenants can be removed in 20-40 days if they fail to pay their rent in the 3 business day time period of the Three Day Notice, but cannot be forced to pay money they may owe. The days of "debtors' prisons" are long gone.

A debtor in Florida enjoys several significant protections. For example, if the debtor is the head of a household, his wages cannot be garnished (there is a very limited exception for some consumer transactions). Some forms of income can never be garnished, such as disability income or welfare payments. Also, the debtor can protect up to $1000.00 of personal property from seizure for collection (and that's $1000.00 per person in the household, regardless of age). The process of garnishing wages in the event the debtor is not under an exemption is often cost prohibitive.

Some collection alternatives

1. Collection agencies : There are many collection agencies which will vigorously attempt to collect money for you by sending out threatening letters and calling the tenant. Additionally, they often have the capability of finding the tenant through sophisticated skip tracing and hounding them. Sadly, you are probably just one of many creditors that the debtor has. We recommend that you send the accounts to a reputable (and we stress reputable) collection agency, but be absolutely certain that you can prove the amount owed possibly years later, when an attorney for the tenant challenges you. If you are challenged and you cannot prove that the tenant owed you the money you stated was owed, you could end up in a nasty lawsuit in which you will end up paying the tenant and his or her attorney a lot of money, not to mention your attorney who you will have to hire to defend you.

2. Small Claims Court: Small Claims Court is the place where many smaller lawsuits are filed against tenants. You need to file in the county in which the property is located or where the former tenant resides. If you can find the tenant and have him served with the lawsuit, you can end up in court where the tenant may not show up and you will get Judgment against the tenant, the tenant will show up and you will possibly successfully mediate the dispute, or you could lose the case entirely or in part. Worse yet, an attorney could jump in and represent the tenant, and if you lose your case even in part, you may very likely have to pay the tenant's attorney's fees. These fee awards can easily reach thousands of dollars. For those clients who are retired or have a lot of time on their hands, we tell them that they could go to court, fill out the paperwork and file a case against their former tenant. Many of these cases end up with the landlord getting some or all of their money. Many more cases result in the landlord getting a Final Judgment which is suitable for framing. Getting a judgment is only the very first step in the process.

Should you use an attorney?

In most cases hiring an attorney and paying good money to go after bad money is not wise. There are some attorneys to whom we refer clients, such as Troy Lotane of Vance, Lotane and Bookhardt who file a large number of cases in Small Claims Court. Their firm has indeed been very successful at collecting, but they review each case carefully and evaluate the collectibility of the debtor before they will help you make an informed decision whether or not to file suit. There are over 80,000 lawyers in Florida. Will many be happy to take your money so you can sue someone out of "principle"? Yes, but our firm is not one of them.

The Owner wants the Property Manager to file in Small Claims Court

Property managers of single family homes, condos and duplexes are often asked by their out of state owner for whom they manage to file a case for them in Small Claims Court. While some judges allow for this, there is no reason on earth why you should act as the owner's attorney and waste your valuable time in court. Judges do not look kindly on non-lawyer agents representing others in court, and that simple little case can blow up into a big mess.

The tenant has a business! We can collect!

People who own businesses are no easier to collect from than that nice tenant who just has no money or got themselves into a bind. In fact, it is often harder to collect from a business owner. Their business is in a corporate name, and they are used to people not paying them. This equates to them feeling it is okay not to pay you.

The tenant completely trashed the home- I want to sue!

Think about this. Is a person who goes out of their way to destroy the rental property someone who is going to pay you or show up in court? These people are the last to ever dream of paying their debt to you or anyone else. Clearly, these are people you should just forget about. It always strikes us as funny when the property manager goes through great pains to take pictures and videos of a completely trashed unit. These tenants don't pay. It they did, they never would have trashed the unit in the first place.

Is all hope lost?

There are one or two good responsible people in Florida who may actually pay what they owe you. There may be a co-signer involved, which can increase the likelihood of payment, or the tenant's situation may change, and they decide that they have the means to pay. Our recommendation is to give your attorney a call and at least get an opinion. Often an out of state owner of the property does not understand what the laws are in Florida, as they may come from a creditor- friendly state. Your lawyer can give you a quick written evaluation, and possibly your owner will want to then back down or will still want to proceed. Some people are indeed collectable and worth pursuing. Most are not. Sometimes a simple $50.00 letter from your attorney can result in payment. There are many laws governing the collection of debts by collection agencies, lawyers and the original creditor, which may be you! Do you know these laws? Are you ready to take a gamble when you can end up the loser? Do you feel prepared to take on the role of a "collector"? Do you know that you can actually be considered a "debt collector" under Federal law? If your answers to some or all of these questions are "no", take a deep breath and spend your energies trying to keep your rental property rented with good tenants.


(Back to Top)



by Harry Anthony Heist, Attorney at Law

Property manager take great pains, or at least should, screening their applicants. They utilize professional screening companies, pull credit reports, check the public records, run criminal background checks, check references, call up prior and current landlords, all in the hopes of weeding out the bad applicant, so they do not end up with that bad tenant. They then approve the applicant if everything checks out and place them into a home owned by a perfect stranger whom they have never seen and lives 1500 miles away. The property manager then begins collecting rent and sends this money off to this perfect stranger. Sounds a bit odd, but that is the way it goes. Three months into the lease, the tenant comes to the property manager's office with foreclosure papers that were just served on them by the local sheriff's deputy. What is this about? The property manager opens the mail to find that the condominium association is demanding payment of the association fees or assessments which are 6 months past due and threatening legal action for this. While reading the tax notices in the newspaper, sure enough, the owner has not paid property taxes for last year. The property manager calls the owner multiple times and never gets a call back. The tenant is angry and wants to break the lease, and also does not feel he should pay any rent if the owner is not paying the mortgage. You are stuck in the proverbial "middle" of this mess. While there is no way to assure a property owner is going to pay their mortgage, insurance, association fees, or any other bill, most likely the property manager did no investigation whatsoever on the property owner.

Who owns the property?

Your first step needs to be researching who the actual owner of the property is right now. To do this, you need to check the tax records, but more importantly, look at the latest deed to the property. Many title insurance companies will be glad to provide this information to you at little or no cost. It is possible that a trust owns the property, only the husband, only the wife, a partnership, a corporation or any other form of ownership out there. When that management agreement is signed, you need to make sure it is signed by the actual owners or authorized representatives of the owner. With the tough market right now, we are seeing more cases of fraud by companies who for a fee or percentage are "helping out " distressed owners, and they will come to you posing as the actual property owner. Shady characters take advantage of desperate people.

The Mortgage

With thousands of properties going into foreclosure, the chances are extremely high that the above situation will happen to you. Almost every property manager has or will encounter this situation, as owners at high rates are allowing themselves to go into foreclosure or simply walking away from the property. We are now recommending that you ask the property owner for proof of payment of the last 5 mortgage payments. Additionally the property manager needs to look up on the Clerk of Court's website for the county in which the property is located to see if a Notice of Lis Pendens has been filed by the mortgagee. This is the notice that is filed just prior to a foreclosure action being instituted. It is possible that the property is actually already in foreclosure, and this will be determined by a simple public records check that is available for free in almost every county.

The Taxes

A simple check with the Property Appraisers/Tax Collector's office will reveal whether the owner has paid the property taxes for the prior or current year in which they are due. Failure to pay the taxes can result in a lien and tax sale, or trigger a foreclosure, as it may violate the terms of the mortgage.

The Insurance

It is imperative that you never manage a property that is uninsured. Many property owners have decided that will take a chance and not pay the insurance, as the cost has become so prohibitive. Some owners feel that the tenant should get insurance and that this is enough. If you cannot get the insurance company to put your company down as an additional insured, have the owner provide proof to you that the property currently has insurance that is paid up to date.

Condo/Homeowner's Association Fees and Assessments

Prior to accepting the property for management, demand proof that all fees and assessments are paid up to date. These obligations are often the first to go unpaid by an owner in financial difficulty, and we know there are a lot of them out there right now.

When repairs are completed, you will be on solid footing to demand the full rent.

Destruction of premises. If the rental premises are destroyed, the owner might wish to terminate the lease rather than do repairs. Unfortunately, the option to do this is limited. The Florida statute does not entitle the landlord to terminate the tenancy under these conditions. The tenant can do so, but not the landlord.

The landlord can terminate the tenancy due to destruction only if the lease says he can. This language is usually found in a paragraph titled "Casualty" or "Maintenance".

If the lease does not contain language that permits the landlord to terminate the tenancy, yet repairs are out of the question, the owner may want to "invite" the tenant to terminate the tenancy. The landlord would suggest to the tenant that the tenant could give notice to vacate and be released from the lease.

Data and documentation Sure, everyone knows to take photos of damage after the hurricane, but do you have photos of what the place looks like now? It is sometimes hard to fully appreciate an "after" picture without having a "before". You should record and document the condition of the rental premises now, before the winds blow.


(Back to Top)



by Cathy L. Lucrezi, Attorney at Law


Childhood is meant to include adventure. Play and risk-taking is part of each person's development. Landlords don't want to thwart that; they just hope that it doesn't result in injury on the property. Fair housing requirements sometimes seem to run counter to promoting safety. A landlord's rules cannot discourage families from renting the property or place unfair burdens on them.

A landlord who wants to establish rules that require adult supervision while using certain amenities should keep these tips in mind:

-- Age restrictions should reflect health and safety rules in the area. If there are none established by local government, check the with the property's insurer. It may have some guidelines.

-- Exercise equipment is often designed for a certain body size and so may not be appropriate for children. Check with the manufacturer to see what it recommends for size restrictions.

-- If the child can use the amenity with supervision only, be careful the rule states "adult supervision" or "accompanied by responsible adult". If you use the phrase "must be accompanied by parent", you would be placing an unreasonable burden on families with children and likely violating the law.

-- Use the least restrictive rule possible. For instance, a landlord's safety concerns may just as well be met a rule that requires children between the ages of 13-17 to have at least one other person present who is 13 or older. A rule that excluded everyone under 18 years old without an adult present is almost always too strict.

-- Pool rules should be reasonable for the use and enjoyment of all tenants. "Adult swim" hours are not permitted. You may want to designate part of the pool for lap swimming during certain hours of the day, open to all tenants.

-- Computer rooms and business centers cannot be restricted only to adult use. Just as with a pool, it may be appropriate to establish some supervision guidelines based on age.

-- Document your reasons for establishing the rules that are in place. If you based your pool supervision rule on a memo sent by an insurance company, put that in your file. If you based the age restriction for use of free weights on your local gym's recommendations, make a record of it. This type of documentation may later be invaluable. It will show you had sound business reasons for your decisions.


(Back to Top) revs'd 8/20

Law Offices of Heist, Weisse & Wolk, P.A.
Phone: 1-800-253-8428 Fax: 1-800-367-9038

Serving Florida's Property Managers with main office in Fort Myers Beach. Available by appointment in Orlando and Clearwater

|     Home Page     |     Firm Profile     |     Attorney Profiles     |     General Services     |     Apartment Communities     |     Residential Managers     |     Apartment Communities     |     Residential Managers     |     Homeowners/Investors     |     Eviction Q & A     |     Legal Articles     |     Training/Events     |     Contact Us     |